If you have lost your job, you may be wondering if you can obtain relief from your debt by filing a bankruptcy case. There is no law that requires an individual to be employed in order to qualify for bankruptcy protection. As a matter of fact, loss of employment is one of the primary reasons people file a Chapter 7 or Chapter 13. There is also no minimum amount of debt you must have to file a case.
It is important to confer with a seasoned attorney before filing your case because being unemployed can impact how your case proceeds. Being unemployed may make it easier for you to pass the means test and qualify for a Chapter 7. Not having a job may result in your income falling below the median household income for the state where you reside and you will pass the means test. If you fail the test, you will most likely have to file a Chapter 13. However, without being employed, you may not be able to fund a Chapter 13 repayment plan. Thus, it may be necessary to wait until you are employed again to file a Chapter 13.
You should also think carefully about the timing of filing your personal bankruptcy. For example, the means test measures your income by looking at the past six months of your income. So, if you previously had a job with a high paying salary, your means test results could be misleading when compared to your current financial situation. Thus, you don’t want the bankruptcy court to think you can afford to fund a Chapter 13 plan when you actually can’t. Again, it is imperative to confer with your bankruptcy attorney to not only understand the type of case you will qualify for, but also the best timing for filing your case.
If you have lost your job and would like to discuss your debt relief options, let us help. We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation with an attorney at Levitt & Slafkes, P.C..